British institutional investors piled into the flotation of the Turkish low-cost airline Pegasus Airlines, taking a third of the shares on offer in evidence of a thaw in sentiment towards IPOs.

Shares in the Turkish equivalent of easyJet rose by 2 per cent in the first day of trading in Istanbul yesterday, valuing the business at L1.95 billion (£700 million).

Its owner, Esas Holding, a conglomerate owned by the Sabanci family, had tried to get the company airborne for three years but rising fuel prices, unrest in the Middle East and weak investor appetite have intervened.